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High income earners should pay charity levy, study finds

High income earners who pay a charity levy will have better mental health and more trust in government

High income workers should be made to pay a charity levy that bridges the gap between the rich and poor, according to a new study.

A paper written by David Griggs and Liam Smith, and published by Monash University, suggested that making donations a mandatory levy for high income earners could improve a donor’s happiness and increase trust in government bodies.

Once an income reaches a certain level that most people would deem wealthy, the high income earner would then be required to donate a small percentage of their income to a charity, community or tax deductible organisation of their choosing.

“This is an alternative method of wealth distribution, or changing how the pie is sliced,” the paper read. “Hence, it begins to address the issue of wealth inequality, but there are other aspects that are also potentially attractive.”

Under the proposed system changes, the co-author said the move could increase positive community changes and attitudes.

According to the study, high income earners that donate as part of the levy will benefit from improved mental health as giving is deemed contagious. On top of this, the paper predicts donors will become more trusting in the government’s taxpayer spending.

“It gives people another cause or another reason … to be and even another focus and we all know that what we do outside of our work lives can often be really important in our own identity and our mental health,” Smith told ten daily.

Smith told Ten Daily the idea was derived from the Abbot Government’s Budget Repair Levy imposed on people who earned more than $180,000 a year.

“We didn’t see or hear a lot of opposition to it … and we didn’t hear a lot of opposition from the rich either,” Smith said. “I think some people didn’t like it but there was popular surrounding it.”

The changes will also be aligned with the 17 Sustainable Development Goals, particularly by reduce inequality within and among countries.


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